Coca-Cola has agreed to review its top sugar suppliers to ensure that the company does not buy from large plantations that were assembled using “land-grab” tactics that evict small farmers or local residents, the company announced this week.
The soft drink company is taking the action on the urging of human rights group Oxfam. As part of a series of commitments announced on its Web site Thursday night, Coke also disclosed the names of its top individual sugar suppliers for the first time — Brazil’s Copersucar, Thailand’s Mitr Phol and Nigeria’s Dangote — and identified Brazil, Mexico and India as its top three national sources of the sweetener.
The company said it would conduct independent “social, environmental and human rights” assessments of its top 16 sugar-supplying countries, beginning this year with Colombia and Guatemala and continuing with Brazil and four other nations where Oxfam feels “risks exist for land tenure violations.”
The company framed its announcement as “zero tolerance for land grabbing.” In practice, it said that its sugar suppliers and vast network of independent bottlers would now have to ensure that land for sugar production was acquired with the “free, prior and informed consent” of local owners or communities that had traditional use of the property.
In a release on the company’s Web site, Ed Potter, Coke’s director of global workplace rights, said that while the company did not directly buy sugar or own sugar farms, “we acknowledge our responsibility to . . . use our influence to help protect the land rights of local communities.”
The steps promised by Coke are the latest example of a major global brand agreeing to assert more direct oversight of the vast and hard-to-regulate supply chains that have helped hold down prices for consumer goods, but sometimes at the cost of subpar or even dangerous working conditions in developing countries.
After the deadly collapse of a textile complex in Bangladesh in April, a group of largely European clothes retailers agreed to third-party inspections of the factories used to source their goods. The step was a major acknowledgment that companies should help safeguard working conditions in Bangladesh even though the factories were owned by independent contractors.
Oxfam has been pushing major global consumer-goods retailers to expand supply-chain protections and said the announcement by one of the world’s biggest purchasers of cane sugar could prompt other firms to do the same.
Sugar “has a history of land conflict problems,” said Chris Jochnick, Oxfam’s head of private-sector engagement, who negotiated Coke’s land tenure commitments. “Companies don’t want to dig under the surface of this. They don’t want to know.”
“Land grabs” are a controversial concept among development economists. Consolidating tracts of land into larger plantations to grow crops for export could leave a country better off, with the foreign exchange earnings allowing it to more than replace the lost production of food for local consumption.
But Oxfam and other groups have documented cases over the years in which individual farmers or communities have been evicted without compensation, warning or knowledge of what was happening.
Jochnick said there was no direct evidence that Coke was sourcing sugar from companies that engaged in such tactics. But given the company’s huge global footprint, “there should be a presumption that they will run into problems” as they peel back the connections between giant sugar conglomerates such as Copersucar and the network of farms that supply raw sugar cane.
A recent Oxfam report said that sugar production was the motive for 100 large corporate land deals involving 10 million acres over the past 13 years and argued that the competition will only become more intense as demand grows.